Previous work identified four upstream cis-acting elements required for tissue-specific expression of the alpha-fetoprotein (AFP) gene: three distal enhancers and a promoter. To further define the role of the promoter in regulating AFP gene expression, segments of the region were tested for the ability to direct transcription of a reporter gene in transient expression assay. Experiments showed that the region within 250 base pairs of the start of transcription was sufficient to confer liver-specific transcription. DNase I footprinting and band shift assays indicated that the region between -130 and -100 was recognized by two factors, one of which was highly sequence specific and found only in hepatoma cells. Competition assays suggested that the liver-specific binding activity was HNF-1, previously identified by its binding to other liver-specific promoters. Mutation of the HNF-1 recognition site at -120 resulted in a significant reduction in transcription in transfection assays, suggesting a biological role for HNF-1 in the regulation of AFP expression.